Scotiabank strategists Shaun Osborne and Eric Theoret report that the Canadian Dollar (CAD) is little changed as USD/CAD retreats from repeated tests of the low 1.37 area, with the broader US Dollar (USD) tone remaining the primary driver of the pair's movement [1]. Despite minor gains in the USD, the strategists emphasize that the overall bearish trend in USD/CAD is still intact, as indicated by consistent bearish signals across short-, medium-, and long-term technical oscillators [1].
The analysts note that recent CAD losses have pulled USD/CAD away from its estimated equilibrium level of 1.3574, stretching fair valuation once again [1]. They caution that unless there is a significant increase in market tensions or a stronger haven bid for the USD, the potential for further USD/CAD gains appears limited in the short term [1].
Key technical levels are highlighted, with resistance identified in the low to mid-1.37 zone and support at 1.3625. The bearish outlook would be challenged if USD/CAD were to move decisively above 1.3750 [1].
No specific market reactions or analyst forecasts beyond the technical outlook are provided in the article [1].
CONCLUSION
Scotiabank maintains a bearish outlook on USD/CAD, citing persistent technical signals and stretched valuations. Unless market tensions escalate, the upside for USD/CAD is expected to remain limited in the near term.